Administration officials claimedcredit for the price drop, while health policy experts said it wasa reaction to insurers' huge profits following hefty premiumincreases on plans offered this year. (Photo:Shutterstock)

After two years of double-digit price hikes, the average premiumfor individual health coverage on the federal health law's insurance marketplace will drop by 1.5 percentfor 2019, the Trump administration said Thursday.

The announcement marked the first time average premiums have fallen since theexchanges created by the Affordable Care Act went into effect in2014.

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It also comes during a bitter midterm congressional campaignseason in which health care is a central issue following last year's efforts byRepublicans to repeal the ACA.

Administration officials claimed credit for the price drop,saying it was due to their actions to make changes to the law.Health policy experts said it was a reaction to insurers' hugeprofits following hefty premium increases on plans offered thisyear.

The federal exchange covers about 9 million people in 39 states.The other states and the District of Columbia have their own onlinemarketplaces and were not included in the report.

The analysis by federal officials looked at the price of the second-lowest silver plan for a 27-year-oldnonsmoker on the marketplaces. Those silver plans are used by theACA to set subsidies.

Open enrollment for 2019 runs from Nov. 1 through Dec. 15.

Charles Gaba, a Michigan-based blogger who tracks ACA sign-ups,noted that the numbers released by the administration werejust one snapshot of the marketplace.

He said premiums next year will “still be a whopping30 percent higher than they were in 2017, with the vast bulkof that due specifically to sabotage actions taken by the TrumpAdministration and Congressional Republicans.”

Before the 2010 health law passed, it was typical for individualhealth insurance rates to increase yearly, largely because peopleneeding the insurance had above-average health risks.

The health law's marketplace was designed to allow shoppers toeasily compare rates for policies that had to meet federal benefitrequirements, such as covering mental health and pregnancycare.

Under President Barack Obama, insurance rates on the marketplacerose 1 percent for plans available in 2015 and 8 percent in 2016.But, just as Obama was leaving office, rates rose 20 percent for2017 plans. Premiums for plans in 2018 soared 34 percent, followingchanges made by the Trump administration that included droppingsubsidies paid to insurers to help cover the cost of out-of-pocketexpenses they shoulder for low-income customers.

“Premiums would have dropped more on average if not for harmfulTrump administration actions,” said Sarah Lueck, senior policyanalyst for the left-leaning Center on Budget and PolicyPriorities. She cited decisions to expand the use of plans thatdon't provide all ACA patient protections and the dramatic cut inoutreach and enrollment assistance for consumers.

The vast majority of consumers buying on the exchange have beenshielded from rate hikes because their incomes are low enough toqualify for federal subsidies. But the marketplace price hikes havebecome a political lightning rod — bolstering the arguments fromTrump and congressional Republicans to repeal the health law.

Administration officials said a decision they made allowingseven states to set up reinsurance programs helped insurancecompanies lower premiums.

Seema Verma, administrator of the federal Centers for Medicare& Medicaid Services, also pointed to new regulations allowinginsurers to sell short-term policies. These policies can be renewedfor up to three years and don't have to meet federal minimumbenefit rules. She said that caused carriers to drop rates on theexchange to be more competitive.

Those new plans are not yet available and are not included inthe marketplace rates.

Despite the drop in prices, Verma said, premiums are still high.“To open the markets to more Americans … as well as the millionswho are priced out of the market, the law needs to change,” shesaid.

Verma, like Trump, has repeatedly called for the health law tobe repealed, but she did not repeat that call on Thursday.

During a briefing with reporters, she was asked about policyexperts who say flat or declining rates for 2019 come mainlybecause insurers raised premiums so much in 2018 in response toTrump administration actions. She replied, “We heard a lot ofpredictions that didn't turn out to be true.”

Cynthia Cox, who monitors the marketplaces for the Kaiser FamilyFoundation, wrote on Twitter: “One big reason insurers are loweringpremiums: Individual market insurers are currently so profitable itwould be hard for many companies to justify a rate increase.”

Those profits are also driving new companies into the Obamacaremarketplace in several states, she said. (Kaiser Health News is aneditorially independent program of the foundation.)

Cox said some efforts by the Trump administration have made themarketplace more attractive to insurers, such as cutting in halfthe open-enrollment period and approving some states' reinsuranceplans. That green light allows states to help insurers pay forextremely costly patients so that premiums for the overall patientpool can remain relatively modest.

Rates still vary dramatically by state. For example, averagepremiums are dropping 26 percent in Tennessee but rising 16 percentin Delaware.

The drop in rates is good news for people buying unsubsidizedcoverage — those with incomes over 400 percent of the federalpoverty level, or about $49,000 for an individual.

Consumers will get less assistance this fall in shopping forexchange plans. The Trump administration cut millions of dollars infunding to the program that pays groups to work with people needinghelp selecting coverage.

Nonetheless, Verma said the falling premiums show theadministration has been defying its critics.

“While some have publicly been accusing us of sabotage, thereality is we have been working hard to mitigate damage caused byObamacare,” she said. “Our actions have succeeded.”

Kaiser HealthNews (KHN) is a national health policy news service. It is aneditorially independent program of the Henry J. Kaiser Family Foundation whichis not affiliated with Kaiser Permanente.

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